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The AIG bonus-bashing, backside-covering sound and fury signifying nothing fizzles out. Curtains close on Kabuki Theater of Outrage…until the next act comes along:

A House panel endorsed a gentler approach Thursday to trying to stop bailed-out financial institutions from giving their employees big bonuses, as lawmakers indicated they were willing to put down their pitch forks and partner with industry to salvage the economy.

The bill directs Treasury Secretary Timothy Geithner and financial regulators to set standards that would determine whether a bonus is “unreasonable or excessive.”

It would exempt institutions that agree to participate in a government-sponsored program aimed at buying up $1 trillion of bad debt, or “toxic assets,” sitting on the books of major banks. Geithner proposed the new investment program on Monday.

The House Financial Services Committee adopted the measure by voice vote, paving the way for a floor vote as early as next week.

The bill, sponsored by Democratic Reps. Alan Grayson of Florida and Jim Himes of Connecticut, was in stark contrast to the approach taken last week by lawmakers furious at insurance giant American International Group Inc. AIG distributed nearly $165 million in employee bonuses after the government committed more than $182 billion to keep the company afloat.

Fueled by populist anger, the House voted 328-93 to tax away 90 percent of any bonuses agreed to in 2008 and paid this year by AIG or other recipients of bailout money.

But that measure stalled in the Senate, as President Barack Obama warned not to “demonize” every investor. Geithner also said industry’s help would be needed to buy up the billions of dollars of sour mortgage securities, or “toxic assets,” sitting on the books of major banks.

“We cannot solve this crisis without making it possible for investors to take risks,” Geithner wrote in an editorial published in The Wall Street Journal.

Rep. Barney Frank, D-Mass., the panel’s chairman, said Democrats decided to exempt firms willing to participate in the effort because “we do want to encourage wide participation.”

The reason many are seeking expedited consideration of an AIG bonus bill is clear enough—to cover up the past mistakes of the majority party and the Treasury Secretary. There was a provision buried deep in the Democrats’ stimulus bill that allowed these bonuses to be paid, and it was inserted at the behest of the Treasury secretary, Tim Geithner. And this gets us to the root of the problem: the bailout approach that Secretary Geithner epitomizes. There is a complete lack of any policy framework, explanation of principles, or coherent approach in dealing with our financial situation. I believe there is a lack of any transparency whatsoever and a seeming indifference to the taxpayers’ interests. The $700 billion bailout bill last October was Congressional ratification of Tim Geithner’s approach to big banks: bail them out.

Well, we are now trillions of dollars past that line and we’re beginning to comprehend the course on which that decision has set us. And I personally believe that trillions of dollars past that line, we’re no better off. I say enough. Tim Geithner’s bailout approach has taken us too far. Instead of Congress using the AIG bonus issue to cover up Tim Geithner’s mistakes on allowing those bonuses, we should take it as an opportunity to fundamentally reevaluate Geithner’s bailouts thus far and put an end to any more bailouts. With the revelations of how AIG is being used to funnel money to foreign banks to make them whole on bad investments at the expense of the US taxpayer, we need to put an end to the Geithner approach on bailouts. The taxpayer deserves no less. Under Tim Geithner, the $180 billion in taxpayer money AIG has received is being used to funnel money to AIG’s counterparties, mostly big investment banks and foreign banks.

In light of all of this, I introduced legislation yesterday to do more than deal with the bonuses. My legislation gets to the root of the problem, the $180 billion we’ve already given to AIG. It’s my understanding that the last $30 billion for AIG from TARP has been agreed to by Treasury, but has not been drawn down yet. My legislation would prevent that from going forward. The taxpayer has given AIG about $150 billion so far. I think it’s completely reasonable to say that once a single company gets $150 billion from the taxpayer, it should be cut off from getting more.